It is possible to get a mortgage if you have poor credit. You will probably pay more in interest as you will be seen as a higher risk. All mortgage companies will check your credit rating.
Your Credit File
Your credit file is with the main three credit reference agencies. In the UK these are Equifax, Callcredit and Experian.
If you are hoping to get a mortgage, it best to check your credit file first. This will give you the information about your credit score. It will also give you the chance to spot any errors or to see whether you are a victim of fraud.
You can get your credit file by contacting the credit agencies. Equifax and Experian. You used to have to do a 30-day free trial if you were willing to give them your credit card number. Or, pay each agency £2.00. But, the good news from this year they are totally free. You can get your credit report on line immediately.
The Details Inside your Credit File
Your credit report will hold details on your bank accounts, credit cards and other loans. Missed or late payments will be recorded. If you have taken out a joint credit agreement, the person’s details will also be on your file. If they have poor credit this will affect your credit score.
The file will also detail any County Court Judgments or Bankruptcy proceedings. This is a public record, so it means anyone applying for your credit file will see this information. If you have been made bankrupt it will stay on your credit report for six years.
If you have had joint financial agreements, but you are no longer with a partner for example, you can have them removed from your report. This can only be done if you don’t now share finances. If you were married and have divorced but still have a joint mortgage, contact the credit agency. They may remove your ex-partners name if you have been apart for longer than 6 months.
Improving Your Score
You can improve your credit score by registering on the electoral roll, making credit card payments on time. Don’t max out your cards and don’t make a lot of loan applications at the same time.
When you apply for a mortgage with bad credit it is likely that the lender will want a larger deposit than normal. This is to reduce the amount that they are lending to you. Expect to have to find at least 15% of the purchase price. The bigger the deposit the better.